Sony Apologizes For the Playstation Network Breach

Sony apologized for losing the personal data of some 77 million customers of its Playstation Gaming Network, at a holiday weekend press conference in Japan held overnight U.S. time. The Wall Street Journal’s Daisuke Wakabayashi was there, and reports that Sony executive Kazuo Hirai, Sony’s number two and widely seen as the most likely successor to CEO Howard Stringer, bowed deeply to apologize for the hassle the company’s customers are undergoing as a result of the breach. It also said it hopes to partially restore service on the gaming network this week and to have it back up and running fully by the end of the month.

Hirai said that some 10 million customers out of the 77 million in total, may have had their credit card information taken. This would explain reports by security researchers who have seen hackers chattering about trading data stolen from Sony in online forums that circulated late in the week.

Asked why Sony didn’t inform customers about the implications of the breach sooner, Hirai said that “sifting through the data took a long time.” He said the company has been under a sustained cyber-attack for about six weeks, and that the personal information of Sony executives and their families have been published online.

The attacks, which were carried out against a data center in San Diego, are taking place against the backdrop of Sony’s recent tangle with the hacker George Hotz, after he uncovered a method to jailbreak the Playstation 3 gaming system in order to allow it to play games that Sony hadn’t approved. Sony sued him, but ultimately settled out of court. However the wrangle enraged hackers in a loosely affiliated community operating under the name “Anonymous.” Hotz has denied any connection with the current round of attacks, as has Anonymous.

Whoever carried out the attack and whatever their reason, the damage to Sony is worsening by the day. Sony’s shares fell more than 4 percent in Tokyo Friday and are now trading at their lowest level in nearly two years. It’s not yet clear how much of a hit to its earnings this incident will cause, though one has to assume that many customers are probably lost both from the Playstation Network and from Qriocity for good.

Hirai said the company may offer to pay fees that credit card companies charge to issue new cards for affected customers. Add to that the costs from additional security measures that will certainly follow, the expense from multiple lawsuits–some of which are already filed–and the cost to respond to regulators and lawmakers around the world who are now lining up against Sony, and it appears this problem is going to get expensive really fast.

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